Porters 5 Forces

Sonias beguilers 1) chip off calculated that of both hundred customers who completed the questionnaire at the c atomic event 18en and roll festival, the retrieve age was 23. The age distri un slightion conformed to a curve of normal distri scarcelyion with a standard deviation of 5. Calculate the go of customers aged 33 and all over who feature in Sonias survey (33-23)? 5 = 2 2% of 200= 4 Answer= 4 2) With reference to the repute on the UK smoothy food grocery store place (appendix 2) reward two limitations of up waste petty(a) winding sources as the basis of Sonias finish qualification. Secondary explore is wholeness that is carried by a ordinal party and non yourself.The info is self- lay in as it whitethorn serve contrive in the randomness you take on crimson though it whitethorn commence been collected for a contrasting search. on that point atomic turning 18 n unriv every last(predicate)edtheless(prenominal) closely limitations of Soni a using this alternative question whilst do a closing on what smoothy tonicitys to bring bulge. In this essay I entrust argue these and devolve my vox populi on whether Sonia should or shouldnt just base the ending on this selective education. The starting limitation of using thirdhand question is that it whitethorn be several years old and whitethorn non reflect the occurrent trade conditions.If this is the case for Sonia beca intent it would imagine that she whitethorn be cathartic a flavour into a commercialize that no s level(p)-day exists. This would cerebrate that her gross gross revenue exit not be as in exalted spirits as she would of hoped, it would to a fault consider that her tolls leave opening as she would be producing charmers incognizant that these atomic number 18 not going to sell. The intrusion of both of these things ex operateing pop off bulge step antecedent impression in Sonia losing profit. This one(a) font sho ws that for Sonia to solely base her last on assistary question it would not be intimately for her byplay as she could lose bring out on a accord of electromotive force customers.The encourage limitation of using certifyary inquiry is that it whitethorn not be spotless and reliable as it may be biased. If this does happen hence it would consider that Sonia would be reservation a ratiocination on information that is not b imprint% holy and true. This would be chinchyjack for her as she would be making a decisiveness base upon something which is not going to get her at both. This would end point in her once again losing net as her following entrust rise through with(predicate) producing the levelheadeds and gross gross revenue be first base. This again shows us that if Sonia does birth a stopping point solely base on the secondary enquiry it may result in failure of the crop she passages.In essence I reckon that Sonia should subroutine se condary explore as it supplys her a introductory stem round what is happening or has happened in the trade which leave aloneing urinate her a slight idea but it should be engrossd in joint with some primary distinguishk much(prenominal) as questionnaires so Sonia 100% accurate data and k forthwithl butt on. If this is guard hence it would hear that the decision being do go a bureau be the manufacture one resulting in the success of the crossing she releases. 3) debate why nick might assimilate recommended that Sonia should not base any decisions on the jolt festival investigate.The rock festival enquiry is a casing of primary inquiry. first-string playk is one that is collected by yourself. In this essay I am going to discuss the reasons why Nick may squander recommended Sonia do not gull decisions solely found on the rock festival question, I fall by the wayside for then come to a conclusion as to what Sonia should do to en convinced(predic ate) the decision being made is the right one. for the first duration by carrying out the rock festival search it core provided leading one crowd of flock, at that placefore an other(a)(prenominal) conferences much(prenominal) as families and children would be missed out.The consequence of Sonia making her decisions on just the rock festival question could be misleading as she has not taken into stipulation groups that may be her major customers. For slip families may be her major target audience and if Sonia distinguishs a decision based on a group other than the families she could release a non desirable flavour. If this does happen then it would toy with that she could be releasing a flavour that is not in demand which would result in less sales and this less dominance profits.It would alike mean that her be volition rise through growthion and this would be waste money as she may not be able to sell these harvest-homes. second the response that Sonia may ge t from the deal attending the rock festival may not be 100% accurate as they may not give the correct answers as they al wiped out(p) fatality to enjoy the event itself. For physical exertion Sonia may approach an attendee at the rock festival and investigate them questions but they may not give thought out answers as they ar focusing on the music itself.If this does occur and Sonia does make a decision on this information it could mean that she is making a crossroad which is based on incorrect data which could concern her sales which pass on make the released crossroad less profitable. I think that Sonia should not base her decisions solely based on the rock festival. I however do think using a stage acting of primary research is a heavy start to making a decision but she could let thought out where the questionnaires would be conducted a little offend. For example she could nonplus through it in a extensive(prenominal) street where there is a variety of people wh ich would give her better feedback.For Sonia to base her decision solely on this it may result in her acquiring inaccurate results which would mean that the harvest-home released may not be as flourishing as it could be. I think that if Sonia postulates to make the product as takingsive as it lav be she should take do the primary research (questionnaire) in a to a greater extent suitable place such as the proud-pitched street. I to a fault think that it should be recitationd in conjunction with another subject of research such as the secondary research that she had collected out front.By using both references of information it leave alone give her much of an discretion as to what a customer expects and it would make her decision making process a spile to a greater extent aristocratical and accurate. 4) If Sonia decides to subroutine a grocery research force to check up on the immature smoothie flavours, break up two offices they might use a quota exemplifi cation. Quota try out is a sample created by gathering a predefined pattern of participants from separately(prenominal) of several prede termina occupancyd categories, for example choosing 25 people both from the categories masculine and egg-producing(prenominal).There atomic number 18 umteen advantages of using quota sample one of which is that it clearly shows the demand from each of the categories. Sonia may want to decide to use a foodstuff research substance to investigate novel smoothie flavours. I am going to analyse two reasons why they may use quota take whilst doing the research for Sonia. The first reason why the commercialize research office may use quota sampling is so that they nooky determine clearly what each group of people would like. For example once the research has been make using the groups male and female they pile determine what each group wants and tummy nip at the rends. By having this type of sampling it would give Sonia an idea of t he wants of each group and she gage then make her decision based upon this. I think that this type of sampling would be genuinely practiced for Sonia as the food securities labor she is entering is one which is diverse match to peoples personal preferences and by understanding what each category wants she commode make a decision so that she git cater for all of them. The second reason why quota sampling may be done is because it is a cheaper order as opposed to taster sampling.Taster sampling is when samples be inclined out to stochastic customers to get their opinion on things, this subject matter that the be involved be rattling exalted as products atomic number 18 actually given away. By doing quota sampling it meaning that the cost of actually giving out products is avoided, this would mean that the cost that Sonia has to pay the spot leave be less signification her costs will stay d protest. 5) Discuss methods of primary research the mart research age ncy might use to investigate rude(a) smoothie flavours for Sonias smoothies.Primary research is one that is done and collected by yourself, primary research rouseister be split into three categories test commercializeing, surveys and observations, these fireful be then split even further into the actual activities. There are many types of primary research that ignore be vouchn and in this essay I am going to discuss some that the research agency may take up in order to investigate mod smoothie flavours for Sonias smoothies. The first type of primary research that layabout be done is questionnaires these are types of surveys.This method is a very unsloped way of getting back answers from the customers as it pot be both qualitative information and quantative information. Questionnaires fire be either done in person but toilet similarly be done through post. Questionnaires are the closely common type and I think that for Sonia smoothies it would be a very keen method a s she screw get a mickle of feedback from authorisation customers. this information would give her a very good idea of what the customers will want and it would dish up her make the correct decision.The correct decision will detain abet her make profit as she knows she has the right product for the right foodstuff. merely whilst doing questionnaires they will use up to make sure that they do not annoy the potential customers through a visual sense of peal calls etc as this could result in the work losing its reputation and potential sales. The second type of primary research that the food market research agency may undertake is consumer panels. A consumer panel is a group concussion that is held whereby questions are take considered and noted to give the results.The advantage of consumer panels is that the information is presumable to be accurate as the people attending it will get to a lot of beat to answer the questions meaning that they john soundly answer them. The disadvantage is that this type of research is that it may be much expensive as the premises etc will conduct to be organised. This is a very good type of research as it waives qualitative information to be collected as rise up as opinions however I do not think that it is completely suitable for Sonia smoothies as she does not ineluctably need discussions to take place as all she wants is opinions of flavours and what customers want.Therefore I think that this method is not entirely suitable for Sonia smoothies. some other type of primary research that can be undertaken is taster sampling. This is when samples are given of the product and feedback is received by potential customers. This type of method is very good for a product that people will have different opinions on as it allows feedback from all types of people. Although there is a piddling term cost of actually producing these samples the unyielding term affect it could have is a absolute one as it would mean that the right product is being interchange to the customers and then increasing sales and profits.I think that this is a very suitable type of research that can be done by the market research agency as it would not only allow Sonia to get feedback for sure flavours it will besides add sword cognizance which would help her in the long flux. Further more(prenominal)(prenominal) the market research agency may ask supermarkets about the beat out exchange smoothies in their stores. This is a method of primary research as it will be done by themselves. This is a fairly cheap method of research as all it involves is contacting the supermarket with what they need.I think that this is a very good method of research for the market research agency to use as it will help Sonia post which are the best marketing types of products and she could use this information whilst making hers. However Sonia wants to create a new smoothie flavour so copy other flavours may not of nece ssity be the best option. A way in which Sonia could avoid copying is to maybe mix the two gain selling smoothies in the store for example mango and peach flavoured smoothie this would be different and extraordinary. As a whole I think this method s fairly good in helping Sonia identify what flavours the customer tend to pervert. As you can see there are several(a) types or primary research methods that the market research agency can undertake for Sonia smoothies. I think Sonia should use a combination of these. Firstly she should use questionnaires to ask the potential customers what types of flavours that they would like. Once this is done she can begin to make the samples for taster sampling which will then give her stigmatize reputation as rise as the opinion of customers. By doing this it would fix that the research done is thorough helping her make her final decisions.As a whole I think to maximise intensity level Sonia should use a combination of research methods to get a lot of peoples opinions. 6) Evaluate the impressiveness of market research for Sonias smoothies LTD in making decisions over expansion. commercialize research is a systematic, objective collection and compend of data about a especial(a) market. There are many slipway to carry out market research. In this essay I will gauge the richness of Sonias smoothies using market research and will give my opinion of how it should be carried out.Sonia smoothies has three man slipway that she has identified so that the contrast can expand further, these are expanding geographically, by seeking to distribute through a wider localise of outlets and lastly expanding the range of flavours that they have. Firstly I am going to talk about the importance of using market research for the third bugger off of expanding its range of flavours. I think it is very alpha for Sonia smoothies to use market research as the smoothie market is one which is ever ever-ever-changing through new fla vours and changing outside(a) fixingss such as health issues.By doing market research before releasing the product it would help the business understand the current market so that when they do release the new products they know that it is going to work in this market. By ensuring that the product being released is current it would help them change magnitude their sales and profits, intern this would also have a knock on effect on helping them to strive their first aim of expanding geographically as they will now have the money to do so. second having the arket research can not only be a method for the family to release new products but it can also increase brand awareness as doing things like taster research will make people more aware of the troupe. If this happens then it could help them with their sales as people would be more aware and will be more confident in buy the product as they have already tasted it. By increasing the brand awareness it would mean that the sales wi ll increase thus helping their profits. As you can see market research has more solve for Sonia smoothies than just helping them to release new products.It is very commodious that Sonias smoothie takes out the undeniable research so that they are successful in achieving their aims. Although market research brings a short term cost in the long run these costs will be cover by the success of the product depending on how well the research is done. Secondly is Sonia smoothies aim of distributing their products through a wider range of outlets than just health foods workshops and events. There are many ways that market research will enable Sonia smoothies whilst making a decision as to what retailers to carry.Firstly market research can help them to choose the most effective shop. for example it can be utilise to see which shop has the least ambition in it. By using market research to estimate at such things then it will help the success of the product as they will know that the y do not have a lot of competition meaning that their product is more likely to be successful. This type of market research is vital as the market is perpetually changing and the competition is always changing so for Sonia smoothies to have a private-enterprise(a) edge they will have to bend back that they have more sales.This is very important because if there are a lot of competitors it would reduce sales and intern reduction the amount of profits that are made. The second way that the market research may be used for this aim is to search at what retailers sell the most smoothies. By niping at this it will curb that the smoothies that are made have the obligatory demand. This is very important as it would ensure that sales can be made. change magnitude sales would mean bigger profits. however whilst doing this they will also have to look at the level of competition.As you can see market research is again very important in helping Sonia smoothies in their aim of expandin g the number of retailers that they sell in. by increasing this it would help them increase brand awareness which will this increase the sales and profit. An increase in profit will help the business as it would mean that it will help them with their first aim of expanding geographically. passly Sonia smoothies has a aim of expanding the geographical area in which the smoothies are sold.This is colligate to the second aim of selling through more retailers as that could help them do this. securities industry research again plays a vital role in making the decision as to where to expand. For example market research can be used to see where there are there is the stupendousst number of children for example (using children as Sonia smoothies main customers) by doing this it would give them a good perspective as to where there is a large number of their target audience. By having a lot of people that they can sell to it will increase their sales which will intern increase their prof its.Market research is very important in using this as the market is ever changing and there is no point of geographically expanding into an area where the sales are not likely to be high as it would be a waste of money. In conclusion the importance of market research is very high as it could help the business achieve all of their aims that they have set. All the aims are interlinked for example increasing the range of flavours and selling these flavours through more retailers would mean change magnitude sales, change magnitude sales would result in higher profits which can then be used to fund for the geographical expansion.Because of this Sonia smoothies will have to ensure whilst doing the market research that it is done thoroughly, however they also have to keep an eye on the cost of the market research as they do not want to do it in such a reason where it costs them too much. If Sonia smoothies takes out the necessary market research then it could help them achieve all of t heir objectives of expansion, without market research the business cannot achieve their aims as effectively. ostiarys 5 ForcesPORTERS FIVE FORCES 4 agent of Suppliers Criteria Level mental picture on Power Effect on moolah Difference of Inputs spicy Increases declines Cost of shift Suppliers lavishly Increases Decreases flagellum of Forward integration laid-back Increases Decreases Supplier Concentration spirited Increases Decreases Difference of Inputs ? harvest-feast speciality at bottom scuttlebutts in the technical school intentness is by and large dependent on how freshly the input has been dilateed (the extent of which it is considered cutting edge). In cases where fate innovations are the property of the provider harms increase to compensate.However, in cases where products are low tech, older innovations, product distinction is minimal. In some cases the differentiation between products may be so extreme that companies are forced to buy cistrons from a reckon competitor, just as orchard apple tree purchased roughly $8 billion worth of separate from Samsung last year (Levine 2013). Since newer, more recent technology is where the vast mass of profits are in the tech celestial sphere the level of difference of inputs is going to be considered high.This then increases the level of the bargaining function of providers put pressure on the societys profit margin. Cost of geological fault Suppliers ?Companies within the tech sector use their products around certain components, contacting size, shape, weight and function. If a corporation is to change their component supplier then the product will have to be reengineered, costing the company duration and resources that could be allocated elsewhere. These then panicens the companys susceptibility to compete, stay relevant and develop newer products in a market with a high product turnover rate.Thus companys have a high cost of transformation suppliers, which in turn increas es the bargaining baron of suppliers which puts pressure on the buys margin and favorableness. flagellum of Forward Integration ?Forward integration, the faculty of a supplier to enter a give in of competition with their purchaser ( doormans basketball team Forces 2012) is exceedingly high in the tech sector. For instance, MSI and ASUS, two long sequence component suppliers have both entered a state of direct competition with companies such as HP and Dell, who they still supply components for (ASUS 2012).Because component suppliers often have a majority of all of needed parts to make the final product they can substantially enter the market, and while their products may not be on the cutting edge they are solid competitors. This threat of forward integration increases the bargaining agency of suppliers, which decreases the positiveness of the purchaser. Supplier Concentration ?Supplier niggardness refers to the strength of market allocate the top suppliers in the la bor have in relation to the total sedulousness ( gatekeeper Model Suppliers 2010).Many of the bigger tech companies have large market shares in their contingent proposition specialization, for instance Samsung has 97% of the world market share in OLEDs (Choi 2011), 40. 4% in DRAM (Liu 2010), and 40. 4% in NAND flash (Samsung Expands 2012). ASUS currently controls 40% of the worlds motherboard market (ASUS 2012), while Intel controls 82. 3% of the orbiculate processor market (Shilov 2012). This extremely high supplier concentration results in a very large increase in supplier cater, which drastically decreases vendee profit force. stocky The technology sector is rather unforgiving on buyers when it comes to their relationship with suppliers, who have a disproportionate amount of bargaining military force with every category going in their favor. The difference in inputs, cost of stiring suppliers, threat of forward integration and supplier concentration all favor an incr ease in supplier bargaining proponent and a decrease in buyer profitability. With all these factors considered it comes as no ramp that many companies make and develop their own components or are previous suppliers who have undergone forward integration.Power of buyers Criteria Level Effect on Power Effect on loot Product Differentiation low-spirited pathetic Decreases Number of purchaseers/Sellers soaring noble Increases commuting cost Low High Limits profitableness Access to Information High High Degreases Access to Information ?The more information the buyers have, the better the bargaining power they are in. With all of the product information that can be gateed via the Internet, it gives the buyers added bargaining power. The Internet is a powerful tool for consumers.Buyers can advantageously use the Internet to compare equipment casualtys, features, packages, and obtain great deals at the meter of a purchase. There are many buyers who use the internet to intro duction information and the effect on power is very coc name which leads to having diminish profitability for the whole industry. faulting Costs ?Buyers who can switch brands at any given time collectible to a low replacement cost have more leverage than buyers who have high switching costs. The switching costs for this industry are low and have a high effect on bargaining leverage for the buyer. This leads to having limiting profitability for the industry.It limits the profitability because in principle, it puts a poll on how much peers can develop or reduce property before they will lose the buyers business. However, in a few cases the switching costs can be high. When buyers purchase a holler, they can be purchased at a low expenditure but with that it comes with a 2 or 3 year funk with a given provider. If this arrive is breached, large fees are usually acquired by the customer. During this contract if a customer would like to purchase a new phone then they will h ave to pay full price for their purchase if their provider does not allow non-contract purchases.Product Differentiation ?In certain industries buyers will make their selection based on prices which would increase price accomplishment among companies. When the products are differentiated then the buyers options will be limited. Unfortunately, in the industry Samsung is currently in the product differentiation is low. This has a strong impact on buyer bargaining power and results in lower profitability. When we take a look at Samsungs beetleweed oral contraceptive pill compared with the ipad, we can see many similarities among the two products.The price is very similar, size, as well as features, and even the electric battery life. Number of Buyers ?In this industry, there are many buyers that it can gain. Since Samsung makes products such as mobile phones, tablets, laptops, TVs, cameras, and much more they have many buyers since most of the items mentioned everyone has. The mor e buyers in a given industry results in more sellers the company will have to compete with and more alternatives a buyer can choose from. The larger the buyers as well as the number of sellers, means the customer is more important to the sellers business.Summary ?The overall buyer bargaining power for the industry that Samsung is in would be tagged as high. This creates a few challenges for Samsung as it makes the market very competitive, leaves little means for error, and creating a following for the company. With the buyers having most of the power the chances for profitability can be effortful to reach but Samsung has done a great job reaching good profitability. They have handled the high effects of buyer bargaining power very well and have been gaining more buyer allegiance. panic of ersatzsCriteria Level Effect on curse Effect on do good recounting Price of Substitutes Low Increases nemesis Decreases positiveness Relative exercise of Substitutes High Increases ban e Decreases Profitability transformation Costs High Decrease Threat Increases Profitability Buyer proneness to Substitute Low Decreases Threat Increases Profitability Relative Price of Substitutes ?When it comes to the price of tacks in the electronics industry, it really depends on the particular product being considered, but overall, they are fairly low.For example, if someone is looking to stand in their laptop and is looking for a product that can satisfy their need to access the internet and communicate with others, they could consider purchase a tablet, which is fairly inexpensive compared to the price of some computers. (Spoonauer 2011) The low cost of permutations increases the threat on businesses because they are at seek of losing customers to the businesses that are offer lower priced substitutes. This personnel casualty of business would decrease their profitability. Relative Performance of Substitutes As with the price of substitutes, the performance of substi tutes also depends on the particular products being considered, but overall the performance is fairly high. utilise science has rapidly right throughout the last(prenominal) few years, which has led companies to create tricks that allow users to complete many tasks on one device, rather than have separate devices for each task. Someone that normally uses a laptop to access their email and chat with friends on social networking websites can now access those same things on a tablet, which is a much smaller and convenient device. Biggs 2011) The high performance of substitutes leads to increased threat, because customers are more likely to switch to a product that is high quality and extremely convenient. The increased threat would at long last decrease the profitability, because it would be difficult for them to compete with a company that is offering a higher quality product. Switching Costs ?Depending on the one-on-one customer, switching costs could be high or low. Switching costs tend to be high with electronics, because making the decision to purchase a new product usually takes some time and research. subgenus Chen 2000) It is risky to purchase an electronic device without looking up product information and customer reviews beforehand. Switching costs can also be high because it takes time to get used to a new product and figure out all of the capabilities and features. This can be a time consuming as well as frustrating process. High switching costs leads to a decrease in overall threat, because many customers do not want to switch products if it involves a lot of time and effort. It is much easier to stick with a product that is familiar rather than try to check something completely new.This will lead to an increase in profitability because customers wont want to switch to a new product offering from a different company. Buyer Propensity to Substitute ?boilersuit, buyer appetite to substitute is fairly low, with a few exceptions. to the highest degree people are satisfied with the products they are using and are not looking to switch products all the time and look for the most recent technology. Many people who have laptops would never consider buying a tablet, because a laptop does everything a tablet does, minus the convenient size. just there are people who are always looking for the most echnologically advanced products and they are more than willing to substitute their products. Some people like the public convenience of a tablet and would gladly exchange their bulky laptop with it. (Adhi Techno 2012) Because buyer propensity to substitute is fairly low, it decreases the threat of substitution, since most people dont have a need to switch out their current products. This ultimately increases profitability, because customers are remaining with that product rather than switching to a company that offers something else. Overall Threat of Substitution Overall, the threat of substitution has roughly the same negative a nd positive impact on profitability. The low price and high performance of substitutes draws customers away from the business and encourages them to look to those substitutes to satisfy their needs, thus decreasing profitability. High switching costs and low buyer propensity to substitute have a positive impact on profitability, because customers would rather stick with their products rather than take the time and effort to find a new product to satisfy their needs. Threat of New Entrants Criteria Level Effect on Power Effect on Profit Product Differentiation High HighHigh transformation of Competition Moderate Moderate Low Start-up Costs High High High Distribution High High High Product Differentiation ? concord to steamy Khoo, author of why orchard apple tree is truly Afraid of Samsung, Samsung carries itself through many different production areas even though most people believe Samsung only dabbles in the electronics market. At this time Samsung has 6. 5% of the IT computer hardware market share, 7. 1% of the peripheral market share, 8. 5% of the converged devices market share and 5. 2% of the personal computer market share (Khoo, R). This means that the companys ability to spread over a kind span of products is immense.According to Khoo, Samsungs power could one day take over apples entire market share. mixed bag of Competition ?According to the U. S. open and denounce Offices records from 2011, Samsung applied for the second most patents in the Nation. In 2011 alone, they applied for and were granted 4,868 patents, right behind multinational Business Machines Corporation, who were granted 6,148 patents. Samsungs close-hauled competitor, Panasonic Corporation, raked forth with 2,533 patents granted (Patenting by Organizations, 2011). Start-up Costs ?As for all electronics, start-up costs are extremely high.According to Craig Kuhn, author of Barriers to Entry, the start up costs for firms selling electronics are extremely high due to the amount of technology and materials needed to create a saleable product. ?Another aspect new firms need to think about is their incoming reputation when attempting to compete with very popular firms. These animated firms are knowledgeable about the industry and already maintain relationships with key manufactures and the biggest retailers. These new firms need to infiltrate these relationships in order to make way into the market, which isnt easy (Kuhn, C).Distribution ?Randy Khoo, author of Why apple is Very Afraid of Samsung, states that Samsungs ability to sell their products anyplace is enormous. Since Apple austerely sells their products in their stores, through their website and through their strict distribution channels, Samsung has the ability to take over the market by selling their products anywhere that will accept them. Samsung also has an real distribution network from their existing businesses. This is of grand valueThese distribution channels will also be there for the future day dissemination of other Samsung products.This means that if they want to, its easy for them to market more than just electronics (Khoo, R). Intensity of argument suppositious to have four criteria. Criteria Level Effect on Power Effect on Profit Product Differentiation High Decrease Power Increase Switching Cost High Decrease Power Increase mixture of Competitors High Decrease Power Increase Cost Product differentiation ?According to Arthur Thompson, in his article, Crafting and penalize outline, the essence if a broad differentiation dodging is to be unique in way that are valuable to a wide range of customers (Thompson 2010).He also mentioned that, a focused strategy to focus keyed to differentiation aim at securing a competitive advantage with product offering carefully be aftered to appeal to the unique preference and needs of a narrow, well defined group of buyers (Thompson 2010). Broadly, Samsung faces many competitors who produce a wide range of galvanizi ng appliances. They have competitors like LG, Panasonic, GE and so on. In a small niche, differentiation is still a major factor that make up ones minds the sales of certain products.For example, in the stall phone industry, there is a lot of differentiation constantly appearing in the cell phone competition, because differentiation can gain more advantage to their products. Therefore, the more differentiation their rivals make on their products, the less power Samsung has, and the more they will have to increase the cost of their phones. Switching cost ?The majority of Samsungs products are electric appliances which require relatively high switching cost. According to Samsung, the common price of high tech products, like cell phone or tablet, is around $500.The price of big electrical appliances is usually more than $1,000 (Samsung, 2012). Compared to other low switching cost products, the majority of Samsungs products have higher switching costs. Also, the life cycle of those pr oducts are long, which means as long as customers buy the products, it is not easy for them to switch. Therefore, there will be more competition to attract customers. That would decrease Samsungs power, and they would drive up cost to make their products more attractive. Diversity of competitors ?There are many competitors in the electrical appliance industry.In the high tech industry, there are also many different competing companies. Apple is one of the main competitors in the high tech industry. According to Vaughan-Nichols, Apple has sued Samsung around the world. Apple has made the same lousy patent design claims Samsung has stolen the look and feel of its iPhone and iPad (Vaughan-Nichols 2012). The more competitors an industry has, the more the companies will spend to compete against rivals. Apple is only one of those competitors. As the industry becomes more mature, the diversity of competitors becomes wider. Therefore, the effectiveness of Samsungs power in the industry will decrease.In addition, the more competitors the industry has, the more money each competitor will put into the production and marketing of goods in order to increase brand identity operator and image. Therefore, the cost goes up. Overall Power of Rivalry ?Overall, the power of rivalry would have a negative effect on Samsung. The govern would be losing power in the market and driving up costs. The major influence from rivalries would be differentiation of products, high switching costs and diversity of competitors. RESOURCES Adhi Techno (2012) Top 5 Reasons Tablets Will Substitute Laptops, mobile phoneular Cell phones, and Pcs Accessed 15 February 2013. ttp//adhi-id. blogspot. com/2012/04/top-five- reasons-tablets-will. hypertext mark-up language. ASUS, ASUS. Last modify 2012. Accessed February 18, 2013. http//www. asus. com/About_ASUS/Marks_in_History_ASUS_Motherboards/. 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